LDK Misrepresents Date of Former Employee’s Report

On October 4, 2007 LDK Solar Co., Ltd. (NYSE: LDK) issued a press release refuting a former employee’s reports of overvaluations in the company’s inventory reporting. The press statement identified the employee as Charley Situ and claimed that he was “terminated for cause on September 25, 2007.” LDK did not provide a specific date for Mr. Situ’s report, but stated that the company learned of the allegations “a few days ago.”

The press statement insinuated that Mr. Situ’s comments were an angry reaction to his termination. On October 9, LDK issued a related statement that characterized Mr. Situ as a “disgruntled, former employee.”

In truth, LDK learned of these inventory problems at least three months before they were publicized. Mr. Situ was simply doing his job as a member of LDK’s accounting staff and he publicized his criticism only after the company refused to correct these problems.

On June 26, Henry Tsai of Morgan Stanley requested certain due diligence information from Mr. Lai. Mr. Lai then forwarded the request to his staff, including Mr. Situ.

Mr. Situ informed his supervisor as early as June 2007, only three months after joining the company.

Posted in LDK Solar Co. Ltd.

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Paul Kaihla
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